Give money to your children on their birthdays or holidays. Make it $100 the first year, $200 the second, and so on. When they are old enough to understand, explain that this money is for their education.

Encourage grandparents and others to also give financial gifts that have the potential to grow—savings bonds, cash, stocks, and bonds, CDs.

Assign yourself a "rent hike." If your monthly housing bill was raised by $50 or $100 a month, you'd have to pay it. So, pretend that you just got a rent hike on your college fund and save this "phantom" increase. When you write out your regular monthly rent or mortgage check, make out another check for the "phantom" increase for your child's college fund.

Set aside raises and bonuses—try banking at least half the dollar amount.

Pay off a loan, such as a car loan, and continue saving the monthly payment—but put it into the college fund.

Have your children pitch in. Encourage them to save half the money they earn doing odd jobs. Reward them by making a matching grant of your own.

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